Nevada faces a “chorus of concerns” over its expansive fiduciary proposal

I was recently interviewed by Fund Intelligence regarding the comment letters sent to the Nevada Securities Division regarding its draft fiduciary duty regulations applicable to broker-dealers and investment advisers. We have already closely analyzed the proposal and written about its potential effects on private fund managers. I told Fund Intelligence: “Now that the comment period has closed, Nevada will have to wade through the chorus of concerns ranging from federal preemption to myriad interpretive gaps and loose threads in the proposal.” Some of the comment letters paid considerable attention to the numerous preemption issues, including under NSMIA and ERISA, created by the draft regulations. In addition to preemption, the proposal also suffers from ambiguity in a number of key areas, which we have previously outlined, rendering the proposal overly broad.

Blog Authors

Sara P. Crovitz

Sara Crovitz, most recently Deputy Chief Counsel and Associate Director of the U.S. Securities and Exchange Commission’s Division of Investment Management, provides counsel on all aspects of investment company and investment adviser regulation. She worked at the SEC for 21 years, including 17 years in the Division of Investment Management focusing on issues under the Investment Company and Investment Advisers Acts of 1940. While in the Division, Sara supervised the provision of significant legal guidance to the investment management industry through no-action and interpretive letters, exemptive applications, IM guidance updates and other written and oral means.

William T. Mandia

William Mandia represents financial institutions and insurers in complex commercial and class action litigation. He regularly defends and advises life insurers, intermediaries, banks, broker-dealers, investment advisers, and other financial services providers in connection with sales practices claims arising from a wide range of financial and life insurance products, including, but not limited to, claims for alleged breach of fiduciary duty, fraud, and violations of state consumer protection laws.

Peter M. Hong

Peter Hong uses his many years of service at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to guide clients through the various regulatory requirements involved in the offer of financial services and products. His practice includes the registration and regulation of investment advisers, broker-dealers, commodity trading advisers, commodity pool operators, and introducing brokers under federal and state laws, as well as the formation and ongoing compliance obligations of registered and private investment companies.